Loans Student Loans Managing Your Student Loans Managing Student Loans: Loan Forgiveness for Disability or Death By Carron Armstrong Carron Armstrong Website Carron Armstrong is a bankruptcy and consumer lawyer, and an expert in debt and bankruptcy for The Balance. She has been helping educate consumers and businesses about finances for more than 40 years through her firm, Carron Nicks Law Firm, her work teaching paralegal and real estate courses at Texas colleges, and her writing. She has a J.D. in law from Tulane University. learn about our editorial policies Updated on July 1, 2021 Reviewed by Marguerita Cheng Reviewed by Marguerita Cheng Twitter Marguerita is a Certified Financial Planner (CFP®), Chartered Retirement Planning Counselor (CRPC®), Retirement Income Certified Professional (RICP®), and a Chartered Socially Responsible Investing Counselor (CSRIC). She has been working in the financial planning industry for over 20 years and spends her days helping her clients gain clarity, confidence, and control over their financial lives. learn about our financial review board Fact checked by Emily Ernsberger Fact checked by Emily Ernsberger Twitter Emily Ernsberger is a fact-checker and award-winning former newspaper reporter with experience covering local government and court cases. She also served as an editor for a weekly print publication. Her stint as a legal assistant at a law firm equipped her to track down legal, policy and financial information. learn about our editorial policies Share Tweet Pin Email Photo: Peter Dazeley sb10069322b-010 / Getty Images After paying on student loans for almost seven years, Carla had an accident that left her unable to continue working in the accounting department of the company she had joined right out of college. Her health was compromised, and she found that she was unable to work at any job enough that she could support herself. Carla applied for disability payments from the Social Security Administration and was approved. Even so, her student loans continued to call her for their $400 per month payments, which constituted a large chunk of her $2,000 a month disability check. She still owes $10,000 in Direct loans and $3,000 for a private loan she took out her senior year to help pay her expenses to study in Paris for a semester. Does Carla have any options? Indeed she does. If a student loan borrower becomes disabled to the point where she can no longer obtain or keep a regular job, she may qualify to have her federally-backed student loans forgiven or canceled. Disability Discharge If a borrower of a Direct Loan, FFEL, PLUS or Perkins loan becomes disabled to the point that prevents them from obtaining or keeping gainful employment, the borrower may be able to obtain relief from the student loan obligation. To obtain relief from student loan obligations due to a disability, Carla must show that her disability is essentially total and permanent. To do that, the borrower can do one of three things: Carla can submit documentation from the Social Security Administration of a determination that she is eligible for Social Security Disability Income or Supplement Security Income.Carla can submit documentation from her physician that she is unable to obtain gainful employment due to a mental or physical impairment thatCan be expected to result in death,Has lasted for a continuous period of not less than 60 months, orIt can be expected to last for a continuous period of not less than 60 months.If Carla were a veteran, she could submit documentation from the Veteran’s Administration showing that she is not employable due to a service-related injury. The information that a borrower provides is specific and detailed. Visit the Department of Education’s disability site to learn what you or your physician must provide and how to apply. Monitoring and Later Reinstatement of Discharged Loans Even if the Department of Education determines that Carla's disability is total and permanent, that decision could be reversed if she later regains health or loses her Social Security eligibility (or Veteran’s disability determination if that applied). For three years after the discharge is granted, the Department of Education will monitor the borrower to ensure that she retains her discharge eligibility. A borrower’s loans may be reinstated if she: Earns more in a year that the federal poverty guidelines for a family of two.Receives a new student loan through the Perkins or the Direct programs or a TEACH GrantReceives and does not return a disbursement under a prior Direct or Perkins loan or TEACH GrantIf the Social Security Administration sets the review period to less than the 5-7 year standard or determines that the borrower is no longer totally and permanently disabled. Discharge Due to Death If Carla died as a result of her accident, or when she later dies, her federal student loans will be forgiven. Likewise, if Carla's parents had taken out a Parent PLUS loan on her behalf, the loan will be forgiven when the parent or a representative provides the Department of Education with a certified copy of the death certificate. For lots more information on managing your student loans during difficult financial times, see our articles on the following issues: Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. U.S. Department of Education. "Total and Permanent Disability Discharge." U.S. Department of Education "Discharge Due to Death."